Good news for native advertising haters, bad news for one Kris Jenner: Kim Kardashian is officially being fined by the U.S. Securities and Exchange Committee for promoting a crypto asset on her Instagram. Specifically, the mogul has been fined for “touting on social media a crypto asset security offered and sold by EthereumMax without disclosing the payment she received for the promotion.”
The SEC shared a release this morning confirming that Kardashian has agreed to shell out $1.26 million in fines and interest, and will also cooperate with a continued investigation. Finally, Kardashian reportedly agreed not to promote any crypto asset securities for three years. Crucially, Kardashian made the agreement “without admitting to or denying the SEC’s findings”— in short, settling.
“This case is a reminder that, when celebrities or influencers endorse investment opportunities, including crypto asset securities, it doesn’t mean that those investment products are right for all investors,” SEC Chair Gary Gensler shares in the statement. “We encourage investors to consider an investment’s potential risks and opportunities in light of their own financial goals.”
Gensler continues: “Ms. Kardashian’s case also serves as a reminder to celebrities and others that the law requires them to disclose to the public when and how much they are paid to promote investing in securities.”
In the Instagram post in question (shared on June 13, 2021), Kardashian wrote: “Are you guys into crypto? This is not financial advice but sharing what my friends told me about the ethereum max token!” The statement was accompanied with multiple hashtags, including #disrupthistory and #ad, the latter of which Gensler tells CNBC violates SEC regulations.
“This is about an influencer, a high profile celebrity on their Instagram site, putting out a tout for this token, EthereumMax,” Gensley says. “This is a highly speculative asset class and so when a celebrity or influence is touting it, it’s important that the public understands that relationship and are they getting paid and how much they’re getting paid on their Instagram site.” Exactly how much Kardashian was allegedly paid to tout EthereumMax hasn’t been revealed—but given her choice to settle, it’s not hard to imagine a pretty penny in the mix.